    [Senate Hearing 108-61]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 108-61

       TRIBAL ENERGY SELF-SUFFICIENCY ACT AND THE NATIVE AMERICAN ENERGY
                     DEVELOPMENT AND SELF-DETERMINATION ACT

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 FIRST SESSION

                                       ON

                                     S. 424

      TO ESTABLISH, REAUTHORIZE, AND IMPROVE ENERGY PROGRAMS RELATING TO
                                 INDIAN TRIBES

                                      AND

                                     S. 522

       TO AMEND THE ENERGY POLICY ACT OF 1992 TO ASSIST INDIAN TRIBES IN
                          DEVELOPING ENERGY RESOURCES

                                   __________

                                 MARCH 19, 2003
                                 WASHINGTON, DC

    86-005              U.S. GOVERNMENT PRINTING OFFICE
                                WASHINGTON : 2003
    ____________________________________________________________________________
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpr.gov  Phone: toll free (866) 512-1800; (202) 512�091800
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                          COMMITTEE ON INDIAN AFFAIRS

                  BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

                    DANIEL K. INOUYE, Hawaii, Vice Chairman

    JOHN McCAIN, Arizona,                KENT CONRAD, North Dakota
    PETE V. DOMENICI, New Mexico         HARRY REID, Nevada
    CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
    ORRIN G. HATCH, Utah                 BYRON L. DORGAN, North Dakota
    JAMES M. INHOFE, Oklahoma            TIM JOHNSON, South Dakota
    GORDON SMITH, Oregon                 MARIA CANTWELL, Washington
    LISA MURKOWSKI, Alaska

             Paul Moorehead, Majority Staff Director/Chief Counsel

            Patricia M. Zell, Minority Staff Director/Chief Counsel

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page
    S. 424 and S. 522 text of........................................     2
    Statements:
        Bailey, Vicky, assistant secretary for Policy and Intertribal
          Affairs, Department of Energy, Washington, DC..............    73
        Bingaman, Hon. Jeff, U.S. Senator from New Mexico............    75
        Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado,
          chairman, Committee on Indian Affairs......................     1
        Gough, Bob, secretary, Intertribal Council on Utility Policy
          [COUP] Rosebud, SD.........................................    89
        Hill, Vernon, chairman, Eastern Shoshone, Business Council,
          Fort Washakie, WY..........................................    82
        Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice
          chairman, Committee on Indian Affairs......................    70
        Lester, David, executive director, Council for Energy
          Resource Tribes [CERT], Denver, CO.........................    87
        Maynes, Frank E., tribal attorney, on behalf of, the Southern
          Ute Indian tribal chairman, Howard D. Richards, Sr.,
          Durango, CO................................................    84
        Rosier, Theresa, counselor to the Assistant Secretary for
          Indian Affairs, Department of the Interior, Washington, DC.    70
        Roubidoux, Victor, board member, Council of Energy Resource
          Tribes.....................................................    89
        Thomas, Hon. Craig Thomas, U.S. Senator from Wyoming.........    76
        Trujillo, Arvin, Director, Navajo Natural Resources..........    80

                                    Appendix

    Prepared statements:
        Adamson, Rebecca L...........................................   139
        Affiliated Tribes of Northwest Indians (with attachments)....   141
        Bailey, Vicky................................................    95
        Buccino, Sharon, senior attorney, Natural Resources Defense
          Council....................................................   150
        Gough, Bob (with attachments)................................   130
        Hill, Vernon.................................................   114
        Lester, David................................................   124
        Richards, Sr., Howard D., chairman, Southern Ute Indian
          Tribal Council (with attachments)..........................   153
        Rosier, Theresa..............................................    93
        Roubidoux, Victor............................................   127
        Shimek, Robert...............................................   170
        Thomas, Hon. Craig, U.S. Senator from Wyoming................    93
        Shirley, Joe, president, Navajo Nation (with attachments)....    98
    Additional material submitted for the record:
        Richardson, Bill, Governor, New Mexico (letter)..............   171

     INDIAN ENERGY LEGISLATION, S. 434, THE TRIBAL ENERGY SELF-SUFFICIENCY
       ACT, AND S. 522, THE NATIVE AMERICAN ENERGY DEVELOPMENT AND SELF-
                           DETERMINATION ACT OF 2003

                                  ----------

                           WEDNESDAY, MARCH 19, 2003

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:30 p.m. in room
    485, Senate Russell Building, Hon. Ben Nighthorse Campbell,
    (chairman of the committee) presiding.
        Present: Senators Campbell, Inouye, and Thomas.

     STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM
            COLORADO, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

        The Chairman. The Committee on Indian Affairs will be in
    session.
        Good afternoon, and welcome to the committee's hearing on
    two Indian energy bills, S. 424 introduced on February 14 by
    Senator Bingaman, and S. 522, which I introduced on March 5.
    Within hours, our Nation will be embroiled in apparently a
    major ground war in the Middle East and in recent weeks, world
    oil prices have soared to $40 per barrel. I think America has
    to kick the habit on depending on foreign energy and start
    producing more of its own energy. One answer to our energy
    future is in the domestic production, and I just don't mean in
    ANWR either. That is going to be subject to a vote at 3
    o'clock, by the way.
        Indian-owned energy resources are still largely
    undeveloped--1.81 million acres are being explored or in
    production, but about 15 million more acres of energy resources
    are undeveloped. I believe the chart out front here shows a
    little bit more of what I am trying to describe.
        There are 90 tribes that own significant energy resources,
    both renewable and nonrenewable. Many of them want to develop
    those resources. Today we will hear from the Bush
    administration and tribal witnesses. I certainly welcome all
    committee members.
        [Text of S. 424 and S. 522 follow:]

        The Chairman. I will put my full statement in the record
    because we do have a vote at 3 o'clock. What we will probably
    have to do is try to get through the first panel, take a break
    and then come back for the second panel.
        With that, I would like to turn to our Vice Chairman,
    Senator Inouye.

     STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII,
               VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

        Senator Inouye. Thank you very much, Mr. Chairman, for
    scheduling this hearing, because these initiatives are very
    important and intended to provide support to tribal governments
    in the development of energy resources on Indian lands, and to
    provide incentives for partnership with tribes that want to
    develop their resources. With the vast untapped resources on
    tribal lands throughout the United States, it is clear that
    Indian country has an important contribution to make to our
    Nation's energy reserves.
        I am pleased that our colleague from New Mexico, and the
    author of one of the measures we consider today, Senator
    Bingaman, will be with us a little later in the hearing to
    address this bill. I thank you very much, Mr. Chairman.
        The Chairman. Thank you. Senator Bingaman might wait until
    after the vote to be here to introduce his bill.
        We will go ahead and start with Panel I. Theresa Rosier,
    counselor to the Assistant Secretary for Indian Affairs,
    Department of the Interior, and Vicky Bailey, Assistant
    Secretary for Policy and International Affairs, Department of
    Energy, please come forward.
        Theresa, if you would like to start, go ahead.

        STATEMENT OF THERESA ROSIER, COUNSELOR TO THE ASSISTANT
       SECRETARY FOR INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR,
                             WASHINGTON, DC

        Ms. Rosier. Good afternoon, Mr. Chairman, Vice Chairman,
    and members of the committee. My name is Theresa Rosier, and I
    am counselor to the Assistant Secretary for Indian Affairs.
        I am pleased today to present the Department of the
    Interior's views on S. 522, the Native American Energy
    Development and Self-Determination Act of 2003, and S. 424, the
    Tribal Energy Self-Sufficiency Act.
        I will abbreviate my testimony and submit my complete
    written testimony for the record.
        The Chairman. Without objection, that will be fine.
        [Prepared statement of Ms. Rosier appears in appendix.]
        Ms. Rosier. The Bureau of Indian Affairs manages
    approximately 56 million acres of land in trust for individual
    Indians and Indian tribes. Currently there are 1.81 million
    acres of actively leased oil, gas, and coal in various phases
    of exploration and development. In fact, production of energy
    minerals from Indian tribes continues to represent over 10
    percent of the total Federal onshore production.
        Moreover, production from Indian lands in the year 2001 was
    13.1 billion barrels of oil, 280 billion cubic feet of gas, and
    29.4 million short tons of coal. It is estimated that an
    additional 15 million acres of undeveloped energy resources
    exists on individual and tribal land. The potential for further
    energy development in Indian country is exciting.
        Increased energy development in Indian country means
    increased jobs. In many Indian and Alaska Native communities,
    joblessness and underemployment are painfully acute. More than
    ever, tribes need the job and training opportunities that go
    hand-in-hand with expanded mineral and energy development.
        One of the tragic ironies of life in Indian communities is
    that tribes often possess substantial energy resources but yet
    they often pay very high, or the highest electrical costs, and
    sometimes lack complete access to electricity. As the Navajo
    tribe will testify to later today, over 37 percent of their
    tribe does not have access to electricity.
        Consistent with the President's National Energy Policy to
    secure America's energy future, increased energy development in
    Indian and Alaska native communities will help the Nation
    increase its domestic energy resources. S. 522 promotes
    increased and efficient energy development and production in an
    environmentally sound manner.
        While the administration supports the goals and objectives
    of S. 522, which are the promotion of self-determination and
    economic development, there are there several provisions which
    we want to work with the committee on before this bill moves
    forward.
        Because this legislation has programs that affect both the
    Department of the Interior, the Department of Energy, and the
    Department of Housing and Urban Development, my testimony today
    will only focus on the Department of the Interior and how the
    bill relates to them.
        S. 522 bills upon the self-determination principles of the
    Indian Mineral Development Act of 1982. It focuses on tribal
    control and tribal flexibility for the exploration, extraction,
    processing, and development of fossil and renewable resources.
    S. 522 would authorize individual Indians and tribal
    governments to enter into energy development leases or business
    agreements without Federal review, as long as two certain
    preconditions have been met.
        One, that the Secretary has already approved the tribal
    regulations which govern these leases and business agreements,
    and two, that these leases and business agreements do not
    exceed 30 years.
        Moreover, this bill authorizes tribes to grant rights-of-
    way over tribal land for electrical, pipeline, and distribution
    lines. There must be three conditions before these rights-of-
    way could be granted.
        First, that the Secretary has approved the regulations
    which govern the rights-of-way; second, that the rights-of-way
    does not exceed 30 years, and third, that the pipeline,
    transmission, or distribution lines serve either a facility
    located on Indian land or energy that was produced on Indian
    land. The Department supports increased tribal regulation and
    expedited review of these regulatory processes.
        As drafted, however, it is unclear whether this section
    would apply to the Department of the Interior or the Department
    of Energy. The Department believes that it is most appropriate
    for the Secretary of the Interior to approve tribal regulations
    which govern the leasing of trust or restricted land,
    conveyances of rights-of-way, and business agreements because
    documentations necessary to prove such tribal regulations
    involve trust records and trust payments and are under the
    purview of the Department of the Interior.
        Generally the Department is supportive of the creation of
    the Indian Energy Resource Commission. We look to the
    Commission to recommend ways to facilitate economic development
    and Indian and Alaska Native communities. Hopefully this will
    mean that there will be more tribal joint ventures, greater
    tribal participation in the building of transmission and
    distribution lines, and increased tribal ownership of power
    plant and utility companies.
        The Department, however, is opposed to the power of the
    Commission to subpoena testimony and records. This Commission
    should not be an investigatory body. Instead, we look to this
    Commission to look to future goals for Indian economic
    development. As we understand it, the General Accounting Office
    does not have the authority to subpoena records from Federal
    Government agencies.
        Now I will discuss S. 424, the Tribal Energy Self-
    Sufficiency Act. Both renewable and nonrenewable energy is
    uniquely positioned to play a critical role as the Nation
    starts to look at domestic energy supplies. In addition to
    traditional energy resources, alternative and renewable
    energies play a critical part in the President's energy policy.
        My testimony today will focus on the provisions of S. 424
    which deal directly with the Department of the Interior. S. 424
    would also increase tribal self-determination. It would
    authorize Indian tribes to lease land for electrical
    generation, transmission, or distribution, and for facilities
    to refine renewable and non-renewable energy sources. There are
    two preconditions that must be met here.
        First, that the lease was approved by regulations which the
    Secretary of the Interior approved and, second, that the lease
    did not exceed 30 years. Moreover, tribes are also authorized
    to grant a right-of-way over tribal lands without the Secretary
    of the Interior approval if the rights-of-way was executed with
    regulations pre-approved by the Secretary, the rights-of-way
    does not exceed 30 years, and that the transmission or
    distribution facilities serve as a facility on Indian lands, or
    that the energy was produced on Indian lands.
        Also, S. 424 authorizes the approval of energy business
    agreements without Secretarial review if a comprehensive
    environmental review process has already been completed. These
    provisions promote increased tribal self-determination as
    tribes administer and regulate their own tribal energy policy.
        Moreover, efficient locally-controlled regulatory
    structures and Indian communities create a business-friendly
    environment that promotes exciting partnerships between the
    tribes, the private sector, and the Federal Government.
        Second, the bill also requires review of the Indian Mineral
    Development Act. It has been over 20 years since IMDA was
    enacted. The Department is already working with tribes to
    review IMDA and to improve energy development in Indian
    country.
        For example, in November or December 2001, the Department
    held an Indian Energy Summit. From this Summit, we have had six
    scoping meetings around the country this past year from April
    2002 until December 2002. The Department talked with tribes and
    started pre-consultations an a National Indian Energy Policy.
    What the Department is looking to do next is to establish
    formal consultations with the tribes to work on an National
    Indian Energy Policy.
        Thank you for the opportunity to testify before you. I
    welcome any questions.
        The Chairman. Thank you.
        Ms. Bailey.

     STATEMENT OF VICKY BAILEY, ASSISTANT SECRETARY FOR POLICY AND
      INTERNATIONAL AFFAIRS, DEPARTMENT OF ENERGY, WASHINGTON, DC

        Ms. Bailey. Thank you, Mr. Chairman, Mr. Vice Chairman, and
    members of the committee. I, too, am pleased to be here to
    discuss proposed legislation, S. 424, and S. 522, regarding the
    Indian Energy Policy and to provide you information on the
    Department's current structure and ongoing programs.
        Our activities reflect Secretary Abraham's affirmation of
    the Department's commitment to meet its responsibilities to
    Indian country in a manner consistent with the government-to-
    government relationship that exists between federally-
    recognized tribes and the Department.
        Before I begin my formal testimony, I would like to commend
    you, Mr. Chairman, and the entire committee on your leadership
    in addressing the challenging issues before us. We all know
    that the United States is better served when the Federal
    Government and Indian tribes work together to meet common
    objectives.
        From an energy perspective, Native American reservations
    contain large reserves of oil and gas. There are an estimated
    890 million barrels of oil and natural gas liquids, and 5.5
    trillion cubic feet of gas on tribal lands. This translates
    into huge potential revenues for the tribes even when
    conservative production estimates are used.
        Indian energy resource development and energy policy, in
    general, are areas where the Department and the Indian tribes
    share many mutual interests and can together influence
    America's future in a constructive manner.
        As Secretary Abraham has stated, the Administration wants
    to work with Congress on provisions that facilitate energy
    development on tribal lands while enhancing and protecting the
    environment.
        The Administration's commitment to a comprehensive and
    balanced national energy policy is in the best interest of all
    Americans. That is why the President announced his National
    Energy Policy in May 2001, less than 4 months after he took
    office. We face many energy challenges that require attention
    now. Enacting an effective National Energy Policy during the
    108th Congress is one of the President's top priorities. We are
    pleased that both houses of Congress are moving forward.
        As you know, today a key House subcommittee is marking up
    comprehensive energy legislation. The short and long-term
    energy supply and demand issues are before us, in addition to
    posing challenges, providing an opportunity for us to improve
    our environment and our economy, while enhancing our energy
    future.
        Americans share many common concerns regarding that energy
    future. Those shared concerns may not offer one-size-fits-all
    solutions. Some issues will require different approaches that
    recognize the unique dynamics at play due to any number of
    factors and circumstances. Certainly there are issues unique to
    Indian country, and we must have the tools to address them
    within our National Energy Policy framework.
        I would like to provide an overview of the Department's
    energy structure in order to provide a reference point for the
    proposed legislation in implementing Secretary Abraham's
    written direction to department heads requesting that they
    honor the government-to-government relationship that exists
    between the Federal Government and federally-recognized Indian
    tribes. Tribal points of contact have been established. These
    50 points of contact focus on relations with Native American
    tribes and Alaska Natives.
        In addition, within DOE's Office of Congressional and
    Intergovernmental Affairs, a Director of Indian Affairs serves
    as the Department's primary point-of-contact on Native American
    issues. A recent vacancy in that position should be filled in
    the very near future, but the work of that office and that
    director continues to be performed through our Office of
    Intergovernmental and External Affairs.
        To give some examples of DOE's tribal activity within
    selected programs at DOE sites, DOE and our power marketing
    administrations are committed to continuing our work with
    tribal governments on the many issues in which we have a common
    interest.
        Mr. Chairman, in the interest of time I will not list those
    representative activities in my oral statement. They are
    included in my formal testimony, and include programs and
    projects within the following three DOE offices: The Office of
    Economic Impact and Diversity, the Office of Energy Efficiency
    and Renewable Energy, and Western Area Power Administration,
    commonly known as WAPA.
        Regarding the legislation pending before the committee, the
    Department is reviewing the provisions of S. 424 and S. 522.
    These two bills are comprehensive and we support the goal of
    maximizing environmentally sound resource development on tribal
    lands. We will continue to study the specific provisions of the
    legislation and look forward to working with you toward
    achievement of our mutual objectives.
        This concludes my oral statement, Mr. Chairman. I hope that
    my testimony provides you and the other members of the
    committee with a good understanding of the importance this
    Administration attaches to our work with American Indian tribes
    and Alaska Natives in the context of the President's National
    Energy Policy.
        I will be pleased to respond to any questions you may have
    and ask that my written testimony be placed in the record in
    its entirety.
        [Prepared statement of Ms. Bailey appears in appendix.]
        The Chairman. Thank you.
        Just listening to the both of you, I have to tell you, it
    sounds like the Energy Department is going to be a lot more
    supportive of Indian programs that the Interior Department. One
    of the big problems that we hear from tribes is that Interior
    either doesn't approve the documents that the tribes need or
    the Department scuttles the deal, or the Department was so slow
    in doing it that the tribes or its business partner loses
    interest.
        After hearing your comments, Ms. Rosier, I think I should
    have kept you on staff here and not let you go over there to
    Interior. [Laughter.]
        I'll pass on that for 1 minute and ask you some questions.
        Senator Bingaman, did you want to talk about your bill for
    a moment?

     STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW MEXICO

        Senator Bingaman. Thank you very much, Mr. Chairman, for
    inviting me here. I do appreciate the chance to say a few words
    about S. 424, that I introduced with your support, Senator
    Inouye's support, and Senator Daschle's support as well.
        This essentially is the title that we included in the
    comprehensive energy bill that we passed through the Senate
    last year. We put a title in there related to development of
    energy resources on Indian lands. We have taken those
    provisions and included them here.
        We think they are important that as we develop this
    comprehensive energy policy in ensuring that there be
    sufficient emphasis on the opportunity that we have, not only
    to develop resources that are on Indian American lands, but
    also to be sure that the benefits of those resources accrue to
    the Indian community.
        We have a terrible problem in my State and in various
    States around the country. Although some of our reservations
    are rich in energy resources, we have many people living on
    those reservations who, for example, have no electricity. We
    need to help both in the development of the resources and help
    to ensure that the benefits of that development inures to the
    actual tribal members.
        That is one of the things we are trying to do in S. 424. We
    do call for setting up in that legislation an Office of Indian
    Energy Policy and Programs within the Department of Energy. We
    expand DOE's authority to assist tribes to help ensure that the
    Federal Government, as a whole, is working with tribes in a way
    that is consistent with the Federal Trust responsibility.
        We do have additional help there. There are provisions in
    the bill intended to help facilitate the citing of certain
    energy projects on Indian land consistent with the sovereign
    authority of the tribes. We have a lot of other provisions.
        There is one area that has become a little controversial
    that I will just call to the attention of the committee so you
    can perhaps address it before you pass on this legislation.
    There are concerns with language in the bill that limits the
    liability of the Federal Government with respect to leases and
    rights-of-way approved by tribes under the citing provisions of
    the bill.
        We are glad to work with you, Mr. Chairman, to be sure that
    those concerns are addressed. We think there is a way to do
    that. I encourage the committee to look closely at that issue
    before you finally pass on the bill. That is something that
    should be corrected at the committee and there is no reason
    that we cannot do that.
         I think that sums up the points I had to make on the
    legislation. I look forward to working with you not only on
    this bill but on your companion bill, S. 522. I hope that your
    committee here can move ahead and we can move ahead in the
    Energy Committee as well and see to it that it gets to the
    President's desk.
        The Chairman. Thank you.
        Senator Thomas, as a cosponsor of S. 522 do you have any
    comments on either bill?

       STATEM,ENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM WYOMING

        Senator Thomas. Thank you, Mr. Chairman. I am sorry that I
    was not able to be here earlier. I do thank you for having this
    hearing. I particularly wanted to be here because Chairman
    Vernon Hill from the Eastern Shoshone Business Council is here.
    I want to welcome him.
        I am on the Energy Committee, as you are, and certainly as
    we develop a comprehensive energy bill, the resources should
    not be overlooked in the Indian lands. I think it is something
    we really ought to do in Wyoming where we have large
    reservations--over 2 million acres. The opportunity is there
    for both our tribes to get some economic benefit, as well as
    benefit to the whole country.
        I was a cosponsor of your bill, Senator Campbell, and
    certainly support what you were seeking to do there. Quite a
    few of members of this Committee are also on the Energy
    Committee. We ought to be able to put something together and do
    it very soon. I look forward to working with all of you.
        I would ask that my full statement be inserted in the
    record.
        [prepared statement of Senator Thomas appears in appendix.]
        The Chairman. Thank you. Maybe before we are called to
    vote, we can ask a few questions.
        Theresa, ever since the Nixon days there has been a clear
    trend in Indian country and Indian policy favoring tribes and
    letting them exercise more authority themselves and more
    control over their own programs. But as I hear your statement,
    it sounds to me that Interior is very concerned over their own
    ability to keep control over what the tribe does with their
    energy.
        Can you tell me if the Department is really interested in
    making sure that the Indians move forward with their own
    extraction process and exploration and the things I think they
    ought to be able to do?
        Ms. Rosier. Absolutely. The Department of the Interior
    strongly supports your bill, S. 522. We are supportive of
    having tribes have more self-determination and have more
    responsibility in the development of renewable and nonrenewable
    energies on their lands. We are strongly supportive of that
    provision.
        We would like to comment and work with you just to refine
    the language, but we are supportive of improvement self-
    determination.
        The Chairman. Do you have any specific examples of how we
    can encourage the Department to provide scientific geologic and
    technical expertise, but at the same time being able to allow
    the tribes to have more latitude?
        Ms. Rosier. In this year's fiscal year 2004 budget,
    President Bush asked for a $2-million increase in the grants
    program that our Division of Energy and Mineral Resources runs.
    What these grant programs do is they award to tribes grants
    which the tribes use to explore their energy potential--
    generally it's mineral. That is part of our budget request. But
    the Department wants to support tribes to explore their energy
    resources and renewable and nonrenewable resources.
        The Chairman. The Indian Energy Commission would look at
    ways to remedy issues like dual taxation. If we retain that
    Commission, what commitments are there that the Department
    would seek funding for it and make it a priority?
        Ms. Rosier. If this bill is enacted, the Department would
    work with this Committee to support and help fund this
    Commission.
        The Chairman. Okay. Good.
        Ms. Bailey, we didn't get your comments until about 2\1/2\
    hours ago. Neither the staff nor I had time to read them so I
    don't have any specific questions. I think you missed an
    opportunity to be able to answer some of those. What we are
    going to do is to put them in writing to you. If you could give
    those answers back for the full committee, I would appreciate
    it.
        Ms. Bailey. Most certainly. I would be pleased to do so.
        The Chairman. Senator Inouye.
        Senator Inouye. Thank you.
        In both bills, the tribes have the authority to execute and
    approve their own leases, rights-of-way and agreements with
    others. If they adopt their own environmental regulations, the
    National Environmental Policy Act review does not apply; is
    that correct?
        Ms. Rosier. NEPA would apply when the Secretary is
    approving the initial regulations. Whether it is a general NEPA
    review or specific NEPA review depends on what the regulations
    say. But you are right. After the initial approval of the
    Secretary, whatever is in the purview of that plan, NEPA would
    not apply.
        Senator Inouye. However, when that happens, in both bills
    the Government of the United States will disclaim all
    liability; is that correct?
        Ms. Rosier. In both bills the language does say that any
    business agreement or lease that is conveyed under these tribal
    regulations, that the Government would not have liability for
    damages; yes.
        Senator Inouye. In your opinion, or the opinion of your
    Department, would these provisions have any impact upon what we
    call the trust relationship between Indian country and the
    Government of the United States?
        Ms. Rosier. The Government would have a trust
    responsibility and the Secretary would approve these leases and
    rights-of-way in the initial review of the tribal regulations.
    After that, it would follow the recent Supreme Court Case,
    United States v. Navajo. There is a limited trust
    responsibility as defined by the language in the bills.
        Senator Inouye. It would permit the Government of the
    United States to wash its hands and say, ``It's none of our
    business;'' is that correct?
        Ms. Rosier. In the vein of tribal self-determination as the
    Supreme Court ruled in Navajo, if there is not a specific duty
    of management or obligation, then the Government is not liable
    for damages.
        Senator Inouye. Is that desirable to the Government of the
    United States?
        Ms. Rosier. The Government supports the language in these
    bills. The Department of the Interior supports the language in
    these bills.
        Senator Inouye. What is the position of the Department of
    Energy? You mentioned the government-to-government
    relationship.
        Ms. Bailey. Very committed to government-to-government
    relationships. We have various projects going on at different
    sites. They are very site specific. But our analysis as it
    relates to S. 424 and S. 522 and some of the provisions you are
    speaking to, we really haven't had the opportunity to get an
    opinion. We are continuing to look at that and trying to come
    together on what our thoughts and responses are. But we haven't
    had an opportunity to get a Department opinion as yet.
        Senator Inouye. As both of you are aware, many years ago
    private enterprise began constructing hydroelectric dams in
    Indian Country and have been operating them for about 50 years.
    They have 50-year leases. They are coming up for re-licensing.
    They impact upon tribal lands and on tribal cultural resources.
        If the tribes are going to participate in their re-
    licensing, I have been told that the cost may be prohibitive.
    Is the Government of the United States and the Department of
    the Interior available to assist and participate in these
    proceedings, such as providing funding to the tribes to
    participate in the Federal Energy Regulatory Commission [FERC]
    re-licensing process?
        Ms. Rosier. Off the top of my head, I don't know our
    numbers for the FERC program this year and what or budget
    numbers are. We do work with the tribes rather closely when
    issuing mandatory conditions. I can follow up in a written
    answer to you.
        Senator Inouye. I am not an expert. I ask this question
    because I have been told that many of these licenses were
    acquired at a time when Indian country was at a disadvantage.
    The Indians were told, ``You take it or else. You like it or
    don't like it. It makes no difference to us.''
        Now if they wish to play a significant role in the
    management of these dams, it is going to cost a whole lot of
    money which they do not have. Would you check to see if
    Interior is ready to help the Indians?
        Ms. Rosier. I will.
        Senator Inouye. Mr. Chairman, I have several more
    questions, but if I may, I would like to submit them.
        The Chairman. Without objection.
        Let me ask just one follow-up question since Senator Inouye
    has touched this subject about managerial control and
    liability.
        If the tribe has managerial control over its resources and
    it makes the decisions, shouldn't the tribe and not the United
    States retain the liability over those decisions, too?
        Ms. Rosier. Yes; the Department of the Interior would. It
    is similar to the language of these bills. We would support
    those tenents.
        The Chairman. Okay.
        Senator Thomas, did you have some questions?
        Senator Thomas. Just one, and it is pretty basic. As we
    look at ways to change things, to make them work better, what
    would you say have been the major obstacles as to why there
    hasn't been more energy development on the tribal lands?
        Ms. Bailey. I will try that first. I think DOE's
    involvement has been ongoing. I think there have been many
    ongoing activities. As I have had a chance to prepare my
    testimony and look at our different offices and the projects in
    which they are involved, there have been a lot of technology-
    related and probably environmental-related work with the
    tribes.
        But as it relates to energy, probably the one I know the
    best is probably the hydroelectric from the standpoint of being
    a former Commissioner at FERC and from the issue of re-
    licensing of dams and working with the tribes in that respect.
    I know that FERC is trying to streamline that process. They
    recently issued a proposed rule that would make some
    administrative changes. I believe Congress is also considering
    legislative reforms.
        But probably a lot of it has to do with coming up with a
    comprehensive plan and obviously funding, making sure that the
    resources are there as well.
        Senator Thomas. You know, the developers provide the money
    in energy development. Why can't that be the case here?
        Ms. Bailey. I'm not saying that it probably couldn't be. I
    have very limited expertise.
        Senator Thomas. It is a puzzle to me. There are obviously
    opportunities on the tribal lands. Yet years have gone by and
    not much has happened. As you prepare to fix it, you have to
    define what you think the major obstacles have been.
        Ms. Rosier. For the Department of the Interior, one of
    obstacles, as you all aware of being on this committee, is that
    we are very slow and we are very bureaucratic. I think we have
    a cumbersome and time consuming process. S. 522 would expedite
    the regulatory process.
        Senator Thomas. Thank you.
        The Chairman. Okay. We appreciate your being here. There
    may be further questions from other people on the committee
    that might be submitted in writing to you both. If you could
    get those back to us, we would appreciate it. Thank you.
        We will now proceed with the second panel as far as we can
    go until we are called to vote.
        Our second panel will be: Joe Shirley, Jr., president of
    the Navajo Nation; Vernon Hill, chairman of the Eastern
    Shoshone Business Council; and Robert Santistevan, director,
    Southern Ute Growth Fund from Ignacio, CO, my home town.
        Your complete written testimony will be included in the
    record if you want to divert from that.
        We will start in that order with Mr. Shirley.

        STATEMENT OF ARVIN TRUJILLO, DIRECTOR OF NAVAJO NATURAL
                               RESOURCES

        Mr. Trujillo. Thank you, Mr. Chairman, and members of the
    Senate Indian Affairs Committee. My name is Arvin Trujillo. I
    am the executive director for the Division of Natural
    Resources. I am here representing President Joe Shirley from
    the Navajo Nation. I would like to extend my greetings to the
    chairman and members of the committee from the president and
    vice president of the Navajo Nation.
        Again, I want to thank the committee for the opportunity to
    make the presentation before the committee as well as the work
    that has been done on S. 424 and S. 522. As noted, we have
    submitted our testimony.
        [Prepared statement of Mr. Shirley appears in appendix.]
        Mr. Trujillo. What I want to basically focus on, Mr.
    Chairman, is the purpose of our meeting here today. The Navajo
    Nation has long been involved in energy development. Since
    1921, the Nation has been involved in the development of its
    resources, starting with oil. In the 1940's and 1950's, we
    extended that toward the development of uranium. In the 1950's
    and 1970's, we again further our developed our oil. In the
    1960's and 1970's we expanded that into coal.
        There are a number of stakeholders involved in the work
    that we do in terms of the development of our energy. The
    written testimony begins to look at three basic factors that we
    are beginning to focus on. No. 1, who benefits from this
    number? No. 2, who controls the effort? No. 3, who is
    accountable?
        Again, there are a number of stakeholders involved. The
    Navajo Nation itself, the size of the nation, and the fact that
    yes, we do have a number of different resources--and I named a
    few. In essence, we also are very much involved in lighting up
    the southwestern portion of the United States as well as
    Southern California. There are tribal members involved. We are
    beginning to see the impacts on the communities as resources
    are developed.
        We are also looking at the tribal membership in terms of
    the government as a whole. There are investors involved--the
    private sector--and how we begin to interact with those
    investors. The Federal Government itself is involved because of
    the agencies that are included. That has been noted in the
    bills that have been developed.
        I guess the bottomline is basically looking at the
    stakeholders. They are seeking a safe and stable environment in
    which to live and to do business. For the Navajo people, this
    simply means clean air, water, the ability to continue
    traditional practices, and the opportunity to improve their
    quality of life.
        For the private sector this is looking at clear rules of
    finality to help them in their business aspects so that they
    can better define how to develop their business practices. For
    the Navajo Government, it means clearly to define a regulatory
    landscape or environment. For the taxpayers themselves, this
    means the advancement of the general welfare in the investment
    in tribes and to get a return--in this case--of energy.
        With that in mind, there is a new paradigm, Mr. Chairman
    and members of the committee, that is beginning to develop.
    That is what the Navajo Nation has been focused on for these
    past 2 years. The paradigm has switched for us as of March 4 of
    this year.
        The goal is to create a return on the public investment to
    advance tribal self-determination and self-sufficiency and to
    wean American off foreign oil. Then the Navajo Nation is a
    major player who has the experience to form a basis of comment
    because of our experience, because of our location, and because
    of our size.
        We are beginning to learn new aspects on how we can begin
    to develop our natural resources not only for the benefit of
    our people and our own government, but also for the benefit of
    the regional area, as well as the southwestern portion of the
    United States.
        Why I come before this committee and to you, Mr. Chairman,
    is to look at some basic principles, fundamental principles,
    that tribes are different. We can't fit all tribes in one box.
    There is a continuum that we have to begin to address. There
    needs to be a sliding scale. That sliding scale must recognize
    a tribe's ability to be self-determinant in certain areas.
        How much control does the government have with the tribe?
    How effective and how efficient are we as tribes in developing
    our own energy, looking at our own regulatory aspects, and in
    addressing our own environmental concerns? That sliding scale
    changes as you look at the different types of development
    within Indian country.
        The second piece is looking at the recent decision by the
    Supreme Court and begin to address trust responsibilities and
    how to define this in terms that support self-determination. In
    the opinion of the Supreme Court there is one statement in
    there that states: ``The ideal of Indian self-determination is
    directly at odds with Secretarial control.''
        We are beginning to see a new philosophy beginning to
    emerge. The honorable Senator from Hawaii has touched on the
    issue of liability. Again, we are looking on how does that
    liability touch our abilities to enhance our efforts to advance
    energy development within our own tribes.
        With that new paradigm the Nation begins to again focus on
    the Supreme Court hearing on March 4, the decision that came
    down. That has changed. The members of your staff have been
    given copies of this.
        The Navajo Nation is moving forward with an effort toward
    developing an energy policy for itself. We have done a
    tremendous amount of research into the area. It has changed a
    lot of our ideas and assumptions. Our Navajo Nation Council at
    this point is beginning to address this new paradigm. How do we
    begin to look at energy development? We have not looked at it
    from a pragmatic point of view, but bringing it all together.
        The Navajo Nation is reanalyzing things that were develop
    as recently as last year. We support the efforts of the
    Senators--both yourself, Mr. Chairman, and Senator Bingaman. We
    support the efforts that were developed in S. 424 and S. 522.
    But we have to reanalyze those bills in view of the decision
    that was given down with the Supreme Court.
        In closing, Senator Craig Thomas asked about development. I
    used the analogy of the triangle, saying that you have to have
    three pieces if you are going to develop anywhere. You have to
    have land. You have to have water. And you have to have power.
    If you miss any of those aspects, development will not happen.
        The way I explain it to my own constituents at the Chapter
    House is that it is like fire. You have to have heat. You have
    to have a fuel source. You have to have an ignition point, or
    oxygen. If you take any one of those pieces out, you won't have
    fire. That is where we stand at this point.
        Respectfully, members of the committee, that is what we are
    working on at this point from the Navajo Nation. We would like
    to request that we submit further detailed testimony relevant
    to each of the bills in lieu of the decision that has been
    said. The president of the Navajo Nation, as well as the
    council, are looking very closely at these issues. We would
    like to bring back a position of the nation that is consistent
    with the decisions that have been made and with some of the new
    directions that we are beginning we move as the Navajo Nation.
        Thank you, Mr. Chairman.
        The Chairman. That is our second bell to vote. With that,
    we are going to take a 15-minute recess.
        [Recess.]
        The Chairman. The committee will come to order.
        Senator Inouye has been detained and won't be back. We will
    go ahead and continue with Vernon Hill.

     STATEMENT OF VERNON HILL, CHAIRMAN, EASTERN SHOSHONE BUSINESS
                       COUNCIL, FORT WASHAKIE, WY

        Mr. Hill. Good afternoon, Mr. Chairman, and members of the
    committee. My name is Vernon Hill. I am the chairman of the
    Eastern Shoshone Business Council in Wyoming. I would like to
    thank you for the invitation to be here.
        My remarks and written statement are submitted on behalf of
    both the Eastern Shoshone Tribe and the Northern Arapaho Tribe.
    I would request that they be submitted into the record.
        The Chairman. Without objection, it will be in the record.
        [Prepared statement of Mr. Hill appears in appendix.]
        Mr. Hill. We generate nearly $180 million annually in
    economic activity, primarily from oil and gas production. We
    provide 1,600 jobs, revenue from our oil and gas operations; 85
    percent of the royalty income is paid out to tribal members.
    This provides food, heat, electricity, and other basic needs.
    For some tribal members, this is their only income.
        We have 850 producing wells. Our oil production totals over
    20 percent of all royalties paid from Indian reservations in
    the lower 48 States. Our natural gas totals nearly 10 percent
    of royalties paid based on known data. We have significantly
    more untapped reserves.
        An ongoing obstacle is the State of Wyoming's 14 percent
    taxation on the production. These taxes on top of the tribe's 8
    percent creates a severe tax burden of 22 percent and is
    primarily a disincentive for additional development. Therefore,
    we strongly urge Congress to address the double taxation
    problem.
        In the 107th Congress we supported S. 1106 introduced by
    Senator Domenici to establish a Federal tax credit based on the
    volume of production of oil and gas from Indian lands. This
    type of credit would stimulate tribal economies and increase
    the overall domestic oil and gas supplies, thereby reducing our
    country's dependence on foreign sources of energy.
        We believe that any comprehensive energy legislation must
    include meaningful tax incentives to encourage, promote, and
    foster energy production on Indian lands. In addition, both our
    tribes own fee lands and have energy potential. Therefore, we
    believe these bills should provide some preference or direction
    to the Secretary of the Interior in processing and approving
    fee to trust applications for energy development purposes.
        With respect to the provisions of S. 424 and S. 522, we
    offer the following comments. We support creating a
    comprehensive Indian Energy and Policy Program in the
    Department of Energy. This program, with appropriate funding,
    will have a positive impact on energy development in Indian
    country.
        We support S. 424's approach establishing criteria for
    awarding funding to tribes. We have concern with a factor which
    involves assessing tribes' financial assets. We believe that
    the income from natural resources not be weighed against the
    tribe, especially in cases where the tribe depends on the
    income from natural resources for over 50 percent of its
    government operations. We recommend that this provision either
    be revised or excluded.
        We support S. 424's assignment to priority in awarding
    grants for inadequate electric service that can be
    demonstrated. We suggest, however, that this factor be
    clarified to reflect the housing demand and the lack of
    affordable energy to serve this need. Moreover, due to the
    specific concerns regarding the location of our tribes on a
    single indian reservation, our tribes recommend changes in the
    bill to reflect this circumstance.
        On our reservation there is a large, unmet housing need.
    However, the primary barrier for our members to face in
    building new homes is the cost of the delivery of electricity.
    We recommend that the loan guarantee amount in S. 424 be
    increased from $2 million to $5 million due to the enormous
    need for capital in Indian Country. We support S. 522's
    provisions that recognize and strengthen the enforcement of
    tribal laws.
        We believe the provision of benefit of wind energy
    production on the Wind River Reservation would be streamlined.
    For oil and gas leasing activities, we are not prepared to
    undertake this approach.
        We are concerned with the cost and liability associated
    with the streamlining approach. As a policy matter, we are
    concerned about releasing the Federal Government from the
    responsibilities over energy resource development.
        The current Federal regulatory regime for oil and gas
    leasing places the responsibilities on the BIA, BLM, and MMS.
    Until we gain a better understanding of the streamlining
    process and its impact on oil and gas leasing, we are not
    prepared to release these Federal agencies from their
    responsibilities. Perhaps the pilot project to examine the
    impact on oil and gas leasing would be advisable as a way to
    assess this more fully.
        Our written testimony includes comments on the specific
    streamlining requirements of both bills as well as comments on
    other provisions.
        This concludes my statement. I would be happy to answer any
    questions. Thank you.
        The Chairman. Thank you.
        We will go on with Sam Maynes for the Southern Ute Growth
    Fund.

    STATEMENT OF FRANK E. MAYNES, TRIBAL ATTORNEY FOR THE SOUTHERN
     UTE INDIAN TRIBAL CHAIRMAN, HOWARD D. RICHARDS, Sr., DURANGO,
                                   CO

        Mr. Maynes. Thank you, Mr. Chairman.
        The good news is that we are getting a lot of needed
    moisture in Colorado. The bad news is that the chairman of the
    Southern Ute Indian Tribe couldn't make it out of Denver to be
    here. So he asked me to speak to the committee.
        The Chairman. The last part of that bad news is that you
    probably won't get home with 4 feet of snow in Denver.
    [Laughter.]
        Mr. Maynes. I was going to speak for some time about the
    success story of the Southern Ute Indian Tribe with which you
    are well aware. The Southern Ute Indian Tribe has developed its
    natural resources over the last 20 years within the system that
    we have. However, we have analyzed for the Southern Ute Indian
    Tribe, S. 424 and S. 522. We have submitted a written statement
    to the committee that summarizes and compares the proposed
    legislation. We make several suggested changes which we feel
    are needed to improve the proposals.
        No. 1. S. 522 provisions that address loans and rights-of-
    way are much broader in scope than S. 424. Therefore, we
    believe that those types of provisions in S. 522 would be a
    greater help to the tribes. However, there is one provision in
    S. 424 that we would suggest be included in any legislation and
    that would be the Indian Preference Provisions in that
    legislation.
        No. 2. The leasing and rights-of-way proposals of both
    pieces of legislation propose a trade that may be unacceptable
    to some tribes. You eliminate the Secretarial approval in
    exchange for tribes' regulations that require consultation with
    State officials, some type of public notification, and
    ultimately private citizen challenges of approved leases and
    rights-of-way. Traditional notions of tribal sovereignty
    protect tribes from incursion of States and nonmembers in the
    decisionmaking process.
        The Southern Ute Tribe believes this is the wrong approach.
    We think that Congress should be concerned with whether or not
    the tribes are capable of making informed decisions in the
    first place and if they are capable of making those informed
    decisions, they should take the responsibility for their
    mistakes as well as for their good decisions.
        No. 3. Tribes generally do not oppose Federal environmental
    laws. But the proposed legislation shouldn't treat tribal lands
    like public lands. For example, NEPA requirements and public
    comment are inconsistent with the internal decisionmaking
    aspect of tribal sovereignty. We suggested changes to
    correspond with IMDA--the Indian Mineral Development Act--
    confidentiality provisions. This is set forth in our written
    statement.
        No. 4. The Southern Ute Indian Tribe joins with this
    gentleman in saying that this legislation should take issue
    with the dual taxation caused by the Cotton Petroleum Supreme
    Court case. Cotton Petroleum makes a disincentive to production
    on tribal lands. We propose and add some legislative language
    in our written statement that would exempt future Indian energy
    development from State taxation to level the playing field.
        Finally, something that is not in the proposed legislation
    would be a revision of the ambiguities that are contained in
    the Non-intercourse Act which was originally passed in 1790.
    The present language that is in the law came about in 1834.
    Many of the statutes affecting Indian tribes have the phrase in
    there, ``Lands subject to a restriction by the United States
    against alienation.''
        There is no distinction between lands held in trust or
    lands held in fee. We give several examples, Mr. Chairman, of
    the problems caused by this in terms of trying to do economic
    development deals and mineral development deals with outside
    interests, outside the reservation--the banks and commercial
    lenders.
        The Non-intercourse Act should not apply to interests in
    lands owned by tribes in fee unless that land is subsequently
    put in trust. If it is not clarified, the Non-intercourse
    language will continue to cause uncertainty as to its
    applicability and continued problems in commercial dealings.
        I can tell you, Mr. Chairman, we have run into that time
    and time again in dealings that the Southern Ute Indian Tribe
    has had with various independent oil and gas companies and
    other oil and gas companies putting together deals where that
    becomes one of the big bones of contention as to whether or not
    the tribe has the power to do it or not.
        In conclusion, Mr. Chairman, the Southern Ute Indian Tribe
    appreciates the opportunity to comment on this proposed
    legislation which is of such critical importance to all energy
    producing Indian tribes. We pledge our support to help this
    committee to work out suitable language that can be considered
    by the entire body.
        Thank you, Mr. Chairman. I would be glad to try to answer
    any questions. I would ask that our written testimony be
    inserted in the record in its entirety.
        The Chairman. Without objection.
        [Prepared statement of Chairman Howard D. Richards, Sr.
    appears in appendix.]
        The Chairman. Thank you.
        Most of the questions will probably be submitted in writing
    as neither Senator Inouye nor Senator Thomas have been able to
    get back.
        I want to just to ask one of each of you.
        Mr. Trujillo, you mentioned 37 percent of the Navajos do
    not have electricity, as I understood you to say. That is
    certainly a sad commentary. What efforts is the tribe doing to
    bring that number down? Are you getting any help from the
    utilities?
        Mr. Trujillo. Thank you, Mr. Chairman. Right now what we
    are doing is working with our utility organization, the Navajo
    Tribal Utility Authority. We have a bill which is called the
    Navajo Electrification Demonstration Program which was
    authorized for $75 million over 5 years.
        Up to this point we have received $3 million. We have been
    able to bring 500 homes electricity. What we are looking at,
    too, is through our new paradigm as we begin to develop new
    generation capabilities, we are looking at developing a
    criteria that would also help support rural electrification for
    our own tribes. This would break that ironic situation where we
    have a generating station that is producing up to 1,500
    megawatts of power. We have homes 1,500 feet away that do not
    have electricity.
        We are working to improve that, Mr. Chairman.
        The Chairman. You provide power for Los Angeles but some of
    your own people cannot get it right next door?
        Mr. Trujillo. That is correct, sir.
        The Chairman. That is sad.
        Mr. Hill, your testimony indicates that you oppose some
    provisions in S. 424 and S. 522 that I thought would streamline
    the mineral lease approval process to put tribes in charge more
    than the Administration.
        The current problem we have with the Bureau, the BLM, and
    the MMS, I thought the goal really was to try to replace that
    with tribal regulations and tribal control.
        Would you like to expand on that just a moment? What would
    you do to modify the existing process to make sure that tribes
    do have more control?
        Mr. Hill. I guess where we have the biggest problem in that
    basically is in the leasing process as the tribes go through
    the approval of sites, or in areas that we are going to develop
    oil and gas. It is basically in the areas of title. From our
    area we send it to the regional office in Billings. That takes
    a long time to do a title search on the lands. That is what
    seems to hold us back. That is basically the biggest problem
    that I see in that.
        The Chairman. Maybe the last question to Mr. Maynes.
        Living there I know very well how progressive the Southern
    Utes are and what a terrific energy story they have to tell. I
    understand other tribes are now visiting the Southern Utes to
    see how they develop their own natural resources. I think that
    is terrific. They have become a model for a lot of Indian
    tribes.
        I just want to say that I am just very proud to have been
    living in that area and watching the development of the
    Southern Ute Tribe. Just for the information for the committee
    and any interested people, that tribe has now become the
    largest employer in Southwest Colorado, not just the county of
    LaPlata, but in about a four or five country area. They are the
    largest employer.
        More than one-half the employees are non-Indians. So with
    all of the development that has gone on with that Tribe, they
    have helped everybody, not just the tribal members. They have
    helped everybody in the area. I would like to think that is a
    standard that we should have all tribes follow in a traditional
    way of Indian sharing, that they not only provide for their own
    people, but in fact they have been good enough to provide for a
    lot of other people, too.
        Thank you all for appearing here. There will probably be
    some questions in writing that will be submitted to you.
        Now we will go to the last panel. Unfortunately, we only
    have about 15 or 20 minutes before I have to go to another
    meeting.
        David Lester, executive director, council for Energy
    Resource Tribes, and Bob Gough, secretary of the Intertribal
    Council on Utility Policy, please come forward.
        We will start with David. Your complete testimony will be
    included in the record and if you would like to abbreviate your
    testimony, that would be good for us. It is nice to see you
    again.

      STATEMENT OF DAVID LESTER, EXECUTIVE DIRECTOR, COUNCIL FOR
       ENERGY RESOURCE TRIBES [CERT], DENVER, CO, ACCOMPANIED BY
      VICTOR ROUBIDOUX, BOARD MEMBER, COUNCIL OF ENERGY RESOURCE
                                 TRIBES

        Mr. Lester. It is nice to see you, Mr. Chairman.
        Thank you very much for the opportunity to come before the
    committee to say a few words about the two bills that we are
    very excited about. We are very grateful for the work that your
    staff has done in working with us, Indian tribes, and other
    tribal organizations in pulling together a national perspective
    on this.
        Outside of the remarks that I have prepared, I was very
    taken by the discussion about what will it take to increase
    Indian production for domestic tribal use within their own
    economies for their own people, as well as energy to sell to
    make America more secure in her energy needs.
        The key word, I think, is ``incentives.'' Increased
    production follows increased incentives. We want to increase
    the exercise of our sovereignty, but we don't want a decrease
    in trust protection or in the efficient administration of the
    trust responsibility. Right now the administration of trust
    responsibility within the Department of the Interior falls
    across four separate agencies. That is a decision that was made
    some 20 years ago.
        If the Commission is established, as the Department's
    remarks indicated that they are committed to do, a revisit of
    how it carries out the administration of its trust
    responsibilities would be very welcome, particularly if that
    were staffed or at least the Commissioners came from energy
    producing tribes. We hope that the Commission could increase
    the accountability of the trust.
        There has not been enough emphasis in recent discussions of
    trust. The trust has a protection or enforcement component to
    it as well. It is all well and good to say that the tribe can
    negotiate the best deal it can across the table if that table
    is even, is equitable, and is not asymmetrical in terms of the
    tilt of the table against the tribe. If we have a fair
    negotiating table, then the tribe can negotiate very fair
    deals.
        The question, though, is: Who is monitoring to assure that
    the deals that they won at the table are actually being
    fulfilled in operation? That is a trust responsibility.
        We support leveling the tax field as well. There are
    disincentives in the tax structure against the production of
    Indian energy resources in this country.
        The trust responsibility makes it clear that need should be
    met with support from both the Department of Energy and the
    Department of the Interior for technical assistance, both in
    terms of building tribal institutional capacity and technical
    assistance in doing the resource assessments.
        Information in this business is power. He who has the best
    information at the negotiation table has the best advantage in
    terms of coming out with a deal favorable to their interests.
    Tribes are often disadvantaged in information about their own
    resources. They are relying on companies to come in with their
    own data collection and their own resource assessments.
        As we saw in the Navajo case, the companies have no
    obligation to put all the information on the table for the
    tribes to know. We believe that is a violation of the trust. We
    think that the trust requires that the tribe be given
    assistance so that the asymmetrical nature of the negotiations
    is removed and we have a level playing field.
        We also mentioned strengthening the role of the Federal
    Government as they market for tribal energy, both fuel and
    electricity produced from Indian energy resources. The U.S.
    Government is the largest consumer of energy in the world, both
    in fuels and in electricity.
        The tribes have gone to agencies, have gone to facilities,
    and have gone to Federal agencies, often with no success in
    terms of coming together as partners in development of
    projects. It is hard to get a generation project going. It is
    hard to get a refinery going. It is hard to develop a project
    if you don't have some assurance that you have a customer at
    the other end of the deal. Investors walk away unless they can
    see that there is a customer.
        The Federal Government could play an important role in
    igniting this by being the customer of first choice for many of
    these tribal projects.
        We are also encouraged by the role that energy efficiency
    could play in Indian country because our homes, our facilities,
    our public buildings, have not been built with energy
    efficiency in mind.
        We are not only the poorest communities in America, but a
    higher percentage of our disposable income is going out the
    smokestack, our windows, and the cracks in the doors of our
    homes and our facilities.
        Again, the incentives should be that the savings stay
    within those programs to increase and improve services. The
    beneficiary should not be the U.S. Treasury but rather improved
    services to local Indians.
        We have comments on particular parts of the bill. We will
    expand on those because we think this is really important that
    we bring energy policy in Indian country into and integrated
    with national energy policy. We need to integrate this into the
    policy framework. We also need to be sure that we can access
    transmission and that we can access the market place and be
    players in the biggest energy market in the world.
        I would ask that my written testimony be placed in the
    record.
        [Prepared statement of Mr. Lester appears in appendix.]
        The Chairman. Obviously there are some good in each of
    these bills and maybe some not quite so good. What we hope to
    do is take the best of both. I have suggestions to try to make
    it a better bill.
        Mr. Lester.
        Mr. Chairman, the treasurer of the Iowa Tribe of Oklahoma,
    who is a member of the CERT Board of Directors and the chairman
    of the CERT Board could not be with us. I would like to
    introduce Victor Roubidoux who is accompanying me today.
        The Chairman. Good afternoon.
        If you have some comments, go ahead and present them.
        Your name for the record?

    STATEMENT OF VICTOR ROUBIDOUX, BOARD MEMBER, COUNCIL OF ENERGY
                            RESOURCE TRIBES

        Mr. Roubidoux. Good afternoon, Mr. Chairman and members of
    the committee. I would like to thank the committee for holding
    this hearing and to give the tribes the opportunity to testify
    on their energy visions and their plans for the future.
        My name is Victor Roubidoux and I am a board member of the
    Council of Energy Resource Tribes. I am also the tribal
    treasurer for the Iowa Tribe of Oklahoma. I am pleased to be
    here today to offer brief comments regarding the importance of
    the proposed Indian energy legislation.
        The Iowa Tribe of Oklahoma is working with CERT for the
    advancement of all tribes toward the National Tribal Energy
    Vision adopted by CERT tribes which states that each sovereign
    Indian tribe will have a sufficient and reliable supply of
    electricity at reasonable costs to support his social and
    economic well being.
        The Iowa Tribe and CERT strongly support S. 424 and S. 522
    and urge its enactment. Each tribe is distinct in their energy
    development to achieve their energy vision. The Iowa energy
    plan focuses on three areas: Energy development on our tribal
    lands; energy procurement opportunities with our tribally-owned
    energy marketing company; and energy efficiency and tribal
    member energy programs.
        The legislation to be considered will provide assistance
    for capacity building and to bring down Federal policy,
    regulatory, and financial barriers for tribes to become full
    partner participants in the electricity market place. From my
    tribe's projects, we would directly benefit by the grants to
    further enhance a hybrid wind and natural gas distributive
    generation project to serve the load of our tribal headquarters
    and the potential generation project on our tribal trust lands.
        Also, our tribally-owned energy marketing company, BKJ
    Energy, has partnered with Cintroleum, an Oklahoma energy
    research company. BKJ Energy will provide natural gas, feed
    stock, to gas to liquid production, and demonstration project
    under the DOE's Ultraclean Fuels Program. The pilot
    demonstration facility at the Port of Catoosa near Tulsa,
    Oklahoma, is under construction, and production of the clean
    diesel is expected this summer.
        This partnership aligns itself with the tribe's overall
    environmental policy. Producing a clean and efficient fuel is a
    cornerstone and philosophy. We strongly urge the creation of
    the Office of Indian Energy Policy and Programs at DOE. This
    Office would be essential to promote tribal sovereignty and
    economic self-sufficiency and move these proposals into
    reality.
        Thank you, Mr. Chairman, for your time and attention.
        The Chairman. Thank you.
        Mr. Gough.

    STATEMENT OF BOB GOUGH, SECRETARY OF THE INTERTRIBAL COUNCIL ON
                   UTILITY POLICY [COUP], ROSEBUD, SD

        Mr. Gough. Thank you, Mr. Chairman, and members of the
    committee. My name is Bob Gough. I serve as the Secretary of
    the Intertribal Council on Utility Policy. I also am part of
    the Rosebud Sioux Tribe Utilities Commission. Both are
    headquartered out there.
        Rosebud, as you may know, has very recently joined a very
    small group of energy generators in being able to be the first
    tribe as a commercial generator of wind energy in the United
    States. We are delighted to be able to say that.
        It has taken us eight years to go through all the hoops and
    hurdles to try to get this one project up. We think there are a
    number of things in this bill that could certain speed that
    process up. We have very detailed comments in our written
    testimony.
        There are a couple of things that I would like to go over
    with the Committee and bring to their attention. In your packet
    there are some maps that we have provided and some materials
    that show the tremendous energy resources, particularly the
    renewable energy resources, in Indian country--wind, solar,
    geothermal, and biomass. There is a tremendous opportunity for
    these to be the foundations for sustainable homeland economic
    development for tribes today.
        When we start looking at the time it takes to actually put
    in renewables, we are talking a matter of months rather than a
    matter of years. There is no reason that these kinds of things
    cannot be expedited. I just agree with the comments of David
    Lester that there is a need for integration for tribal energy
    into the larger system. But it may not mean that we have to
    wait for an Indian energy bill to go through the whole process
    with a complete new Federal energy policy. There are things
    that need to be done today.
        If you look at incentives, tribes are the only group that
    the Federal Government has a trust responsibility for, and yet
    it is the only group in terms of renewables that there are no
    incentives for. The renewables incentives go to production tax
    credit for those businesses and for-profit operations. It goes
    for municipalities and subdivisions of States. Tribes are left
    out of the picture in terms of incentives.
        In our case we are not asking for increased incentives. We
    are asking to be able to participate in the incentives that
    already exists. This bill does that with regard to REPI, the
    Renewable Energy Productive Incentive. We would like to see
    that bill also do that in terms of making the production tax
    credit available either as tradeable, assignable, or as an
    offset.
        When you look at the renewable potential, particularly wind
    in the Northern Plains, 12 reservations have something on the
    order of 300 gigawatts of wind power potential. To put that in
    perspective, that's 100 times more than all of the Missouri
    River produced. It is about half of the installed electrical
    capacity in the United States. It is a tremendous resource.
        But we need to be able to get it on the grid. That grid is
    run and owned by the Federal Government, the Western Area Power
    Administration. We need Federal help to work as full treaty
    partners, and to be able to get our product on that farm-to-
    market road.
        Right now there are disincentives for tribes and for
    renewables to get on that grid. We are the new kids on the
    block in a very old industry. We are going to need to have some
    of those rules changed in a fair way to make sure that we have
    a level playing field to be able to bring this kind of
    production on board.
        The Rosebud Tribe is very excited. Our 8-year planning to
    go in to produce a single turbine of 750 kilowatts has taught
    us many lessons. We have taken it through many hurdles. We are
    ready to spread that information with the other tribes and
    share that. Development can now take place in a much more rapid
    pace because of that.
        We have appreciated the opportunities of working with the
    various Federal agencies. RUS had terms of access for loan
    money that have been available for 50 or 60 years to co-ops but
    not to tribes and not for renewables. They are today because of
    this process.
        What we would ask also is to see if this bill can be done
    in a way that meets the criticism and concerns, and addresses
    those issues brought out in this hearing. It may be moved as a
    stand alone. I think that is very important. There are things
    that could be done today and not hold tribal energy hostage to
    more divisive energy debate that may take years to ultimately
    resolve.
        Many of the provisions of this bill were approved, as I
    understand it, in conference committee last year but the
    overall bill didn't move forward. We have both sides of the
    aisle recognizing a trust responsibility to tribes. We think
    this is one way to do it.
        The Federal Government has a tremendous role to play in
    jump starting the purchase of tribal power, particularly
    renewables. By the year 2005, 19 months ago, 2.5 percent of the
    entire Federal Government's electrical energy purchase
    consumption is supposed to come from renewable energy. Can
    tribes be first in line for that kind of market?
        That kind of power purchase agreement and interconnection
    agreements, that the Federal Government can work with the
    tribes as full treaty partners, can really make the difference
    in moving tribes ahead for producing sustainable homeland
    economic development, energy independence for the United
    States, and a new economic opportunity for Indian tribes.
        With that, I will take questions or yield the time to the
    other members here. I would ask that my statement be placed in
    the record in its entirety.
        [Prepared statement of Mr. Gough appears in appendix.]
        The Chairman. We will have to submit our questions because
    we are running out of time.
        It is my intention to try to bring a consensus bill up for
    a vote in the committee just as quickly as we can meld it,
    hopefully within a couple of weeks. But we will keep the record
    open at least for two weeks if you have any additional comments
    or suggestions as to how we can improve them. I would
    appreciate your doing that.
        Mr. Lester. With your permission, Mr. Chairman, we would
    like to work with your staff to help blend the two bills and
    come out with the strongest possible bill in support of the
    tribal vision.
        The Chairman. I think the timing is right for it, very
    frankly. I don't think that there is anyone in the country that
    doesn't have energy on their mind now, with paying up to $2 and
    more per gallon of gasoline on the West Coast, and the
    dependency on the very country that we are about to get engaged
    in a war. It is just unbelievable that we could do that. So, I
    think the timing is really right.
        Mr. Gough. Mr. Chairman, if I may, I have the honor of
    inviting you, the other members of the committee, and your
    staff, to the Rosebud Sioux Indian Reservation on May 1, for
    our dedication of the beginning of the revolution of new
    renewable energy in Indian Country. Please come.
        The Chairman. I have always been interested in revolutions,
    so I will try to get out there. [Laughter.]
        Thank you. With that, this committee is adjourned.
        [Whereupon, at 4:04 p.m., the committee was adjourned, to
    reconvene at the call of the Chair.]

    =======================================================================

                                A P P E N D I X

                                  ----------

                  Additional Material Submitted for the Record

    =======================================================================

       Prepared Statement of Hon. Craig Thomas, U.S. Senator from Wyoming

        Thank you Mr. Chairman. I would like to welcome Theresa Rosier,
    Counselor to the Assistant Secretary for Indian Affairs at the
    Department of the Interior, Vicky Bailey, Assistant Secretary for
    Policy and International Affairs at the Department of Energy, and
    tribal leaders, including Chairman Vernon Hill of the Eastern Shoshone
    Business Council, for being here with us today.
        As Congress continues to develop a comprehensive energy bill,
    Indian resources should not be overlooked. American Indian lands
    contain a significant amount of the nation's natural resources. The
    Eastern Shoshone and the Northern Arapaho tribes both rely on revenue
    derived from natural resources--oil and gas in particular--to fund
    governmental operations and provide services to their members. Although
    oil and gas are important to these tribes, energy development potential
    has not been fully recognized on the Wind River Reservation, which is
    over 2 million acres in size. It is in our country's best interest to
    develop these resources in an environmentally responsible manner.
        I am pleased to be a cosponsor of Senator Campbell's energy bill
    because it establishes an Indian energy resource development program
    within the Department of Energy. Senators Inouye and Bingaman have also
    introduced legislation to address the energy needs of American Indians.
    It is interesting to note that 9 of the 15 members on the Indian
    Affairs Committee are also members of the Senate Energy Committee.
    Clearly, Indian energy is a priority for me and my western colleagues
    and I look forward to working with them to develop a bipartisan measure
    that will help American Indian economies and provide our country with
    reliable sources of energy Thank you, Mr. Chairman.
                                     ______

       Prepared Statement of Theresa Rosier, Counselor to the Assistant
              Secretary--Indian Affairs Department of the Interior

        Good afternoon, chairman, vice chairman and members of the
    committee. My name is Theresa Rosier and I am the counselor to the
    Assistant Secretary--Indian Affairs within the Department of the
    Interior. I am pleased to be here today to present the Department of
    the Interior's views on S. 522, the Native American Energy Development
    and Self-Determination Act of 2003 and S. 424, the Tribal Energy Self-
    Sufficiency Act.
        The Bureau of Indian Affairs [BIA] manages approximately 56 million
    acres of land held in trust for individual Indians and Indian tribes in
    the lower 48 States and Alaska. Currently, there are 1.81 million acres
    of actively leased oil, gas and coal in various phases of exploration
    and development. It is estimated that an additional 15 million acres of
    undeveloped energy resources exist on individual and tribal land.
    Indian energy development plays an important role in the domestic
    production of fossil and renewable energy. In fact, production of
    energy minerals from Indian lands continues to represent over 10
    percent of the total Federal onshore production. Moreover, the
    production from Indian lands in the year 2001 was 13.1 million barrels
    of oil, 285 billion cubic feet of gas and 29.4 million short tons of
    coal. Since most Indian lands are located in sedimentary basins
    possessing geophysical features frequently associated with natural gas
    and oil, the potential for further energy development on Indian lands
    is exciting.
        Increased energy development in Indian and Alaska Native
    communities means increased jobs in these communities. In many Indian
    and Alaska Native communities, joblessness and underemployment are
    painfully acute. This dismal state of affairs has impeded tribal
    economic development and self-sufficiency. More than ever, tribes need
    the job and training opportunities that come hand-in-hand with expanded
    mineral and energy development.
        One of the tragic ironies of life in Indian communities is that
    tribes possess substantial energy resources yet pay some of the highest
    electrical costs or even lack complete access to electricity. The
    Navajo, for example, reside on lands abundant in minerals. They have
    coal, hydrocarbons, and photovoltaic assets. Yet a huge proportion of
    the Navajo people lack access to any electricity at all. Unfortunately,
    blackouts, brownouts, and other kinds of energy disruptions are quite
    common in many Indian communities.
        Consistent with the President's National Energy Policy to secure
    America's energy future, increased energy development in Indian and
    Alaska Native communities could help the Nation have more reliable home
    grown energy supplies. S. 522 promotes increased and efficient energy
    development and production in an environmentally sound manner.
        While the Administration supports the goals and objectives of S.
    522, the promotion of both tribal self-determination and economic
    development, there are several provisions that we look forward to
    working with the committee on prior to moving forward in the
    legislative process. Because this legislation has programs for the
    Department of Energy, the Department of the Interior, and Housing and
    Urban Development, my testimony is appropriately focused on those
    provisions relating to the Department of the Interior.
        S. 522 builds upon the self-determination principles of the Indian
    Mineral Development Act of 1982 to increase tribal control over the
    exploration, extraction, processing and development of fossil and
    renewable resources. Indian tribes are in the best position to
    determine how and when minerals are to be extracted from their lands.
    After all, increased tribal regulation and responsibility for their
    resources is consistent with tribal sovereignty.
        S. 552 would authorize individual Indians and tribal governments to
    enter into energy development leases or business agreements without
    Federal review as long as certain preconditions have been met. The
    preconditions are that the ``Secretary'' has already approved tribal
    regulations which govern these leases and business agreements, and that
    these leases and agreements do not exceed 30 years. Moreover, the bill
    authorizes tribes to grant rights-of-way over tribal lands for
    pipelines, electrical transmission or distribution lines without
    Federal review if the ``Secretary'' has approved the tribal regulations
    which govern the right-of-way, the right-of-way does not exceed 30
    years, and the pipeline, transmission or distribution lines serve a
    facility located on Indian lands or the energy has been produced on
    Indian land. The Department supports tribal regulation and expedited
    review of these regulatory processes.
        As drafted, it is unclear whether this section would apply to the
    Department of the Interior or the Department of Energy. The Department
    believes that it is more appropriate for the Secretary of the Interior
    to approve tribal regulations which govern the leasing of trust or
    restricted lands, business agreements, and rights-of-way conveyance
    because the documentation necessary to approve such tribal regulations
    requires trust records and payments that are under the purview of the
    Department of the Interior.
        Generally, the Department is also supportive of the creation of the
    Indian Energy Resource Commission. Among other things, the Commission
    is tasked to recommend improvements to the current tax structure
    governing Indian energy production. The current tax structure in Indian
    country imposes multiple severance and ad valorem taxes on those who
    extract and operate energy enterprises in Indian country.
        We look to the Commission to recommend ways to facilitate economic
    growth in Indian and Alaska Native communities. Hopefully, this will
    mean more tribal joint ventures, greater tribal participation in the
    building of transmission and distribution lines, and increased tribal
    ownership of power plants and utility companies.
        The Department is strongly opposed to the proposed power of the
    Commission to subpoena testimony and records. We do not believe it is
    necessary for the Commission's mission. The Commission should not be an
    investigatory body, but rather an entity that looks to what the future
    can hold for Indian energy development. In addition, as we understand
    it, even the General Accounting Office does not have authority to
    subpoena records from Federal agencies.
        President Bush's National Energy Policy report established a
    comprehensive, long-term energy strategy for securing America's energy
    future. Both renewable and nonrenewable Indian energy is uniquely
    positioned to play a vital role as the Nation begins to curb its
    dependence on foreign energy supplies. In addition to traditional
    energy sources, alternative and renewable energy sources are also a
    fundamental component to the President's energy policy. Geothermal,
    wind, hydro, and solar energy, while a small percentage of total U.S.
    energy supply and consumption, are important to the long-term energy
    security of this Nation.
        The purposes of S. 424 are to establish an Office of Indian Energy
    Policy and Programs at the Department of Energy; to encourage greater
    tribal self-determination in the regulation of Indian energy leases,
    rights-of-way, and business agreements; to assess and evaluate the
    Indian Mineral Development Act of 1982; to conduct various studies and
    feasibility analysis related to Indian renewable and nonrenewable
    energy; and to authorize certain Indian energy related provisions. My
    testimony will focus on those provisions pertaining to the Department
    of the Interior.
        S. 424 would authorize Indian tribes to lease tribal land for
    electric generation, transmission or distribution, and for a facility
    to refine renewable or nonrenewable energy without Department of the
    Interior approval. This expedited leasing process is available to a
    tribe if two preconditions have been met: (1) the lease was carried out
    under regulations which were already approved by the Secretary of the
    Interior pursuant to provisions in the bill, and (2) the lease does not
    exceed 30 years. Moreover, tribes are also authorized to grant a right-
    of-way across tribal lands without Secretary of the Interior approval
    if the right-of way is executed with regulations pre-approved by the
    Secretary, the right-of-way does not exceed 30 years, and the
    transmission or distribution line serves a facility located on Indian
    land, or aids the processing of energy developed on Indian lands. In
    addition, S. 424 authorizes the approval of energy business agreements
    without Secretarial review if a comprehensive environmental review
    process has been completed.
        These provisions promote increased tribal self-determination as
    tribes administer and regulate their tribal energy policy. Moreover,
    energy development promotes increased economic opportunities in Indian
    communities. An efficient, locally controlled regulatory structure in
    Indian communities creates a business friendly environment that
    encourages exciting partnerships between tribes, the private sector and
    the Federal Government.
        This section of the bill requires the Secretary of the Interior to
    conduct a review of the Indian Mineral Development Act [IMDA] of 1982
    and report to Congress within 1 year. The IMDA represented a
    fundamental shift in Indian energy development. Since its enactment,
    Indian tribes have become more proactive in developing their energy
    resources. Since it has been 20 years since its enactment, assessing
    the IMDA is important as tribes and Department begin to develop a
    national Indian energy plan. Currently, the BIA is planning a framework
    for formal consultation with tribal leaders regarding a national Indian
    energy policy. These consultations will build upon the groundwork that
    the BIA has recently completed. Since April the BIA has held six Indian
    energy policy meetings throughout the United States with
    representatives from more than 100 tribes to discuss the development of
    a tribally driven energy policy.
        Thank you for the opportunity to testify before you today to speak
    on a subject that is a priority for this Administration, tribal leaders
    and the American public. It is a very exciting and opportune time to
    focus on increased Indian energy development. I welcome any questions
    that the committee may have.

    Prepared Statement of Vicky Bailey, Assistant Secretary for Policy and
                             International Affairs

        Thank you, Mr. Chairman and members of the committee. I am pleased
    to be here to discuss proposed legislation, S. 424 and S. 522,
    regarding Indian energy policy and to provide you information on the
    Department's current structure and ongoing program. These activities
    recognize Secretary Abraham's affirmation of the Department's
    commitment to meet its responsibilities to Indian country in a manner
    consistent with the government-to-government relationship that exists
    between federally recognized tribes and the Department.
        Introduction Before I begin my formal testimony, I would like to
    commend you, Mr. Chairman, and the entire committee on your leadership
    in addressing the challenging issues before us. We all know that the
    United States is better served when the Federal Government and Indian
    tribes work together to meet common objectives.
        From an energy perspective, Native American reservations contain
    large reserves of oil and gas. There are an estimated 890 million
    barrels of oil and natural-gas liquids, and 5.6 trillion cubic feet of
    gas on tribal lands. This translates into huge potential revenues for
    the tribes even when conservative production estimates are used.
        President Bush recognizes the importance of energy to America: In
    his second week in office, when the President established a group to
    draft a national energy policy, he said that he wanted to ``promote
    dependable, affordable, and environmentally sound production and
    distribution of energy for the future.'' Indian energy resource
    development and energy policy in general are areas where the Department
    and Indian tribes share many mutual interests and can together
    influence America's future in a constructive manner. As Secretary
    Abraham has stated, the Administration wants to work with Congress on
    provisions that facilitate energy development on tribal lands while
    enhancing and protecting the environment.
        The Administration's commitment to a comprehensive and balanced
    national energy policy is in the best interest of all Americans, and
    that is why the President announced his National Energy Policy in May
    2001, less than 4 months after he took office. We face many energy
    challenges that require attention now. Enacting an effective national
    energy policy during the 108th Congress is one of the President's top
    priorities, and we are pleased that both houses of Congress are moving
    forward. As you know, today, a key House subcommittee is marking up
    comprehensive energy legislation. The short- and long-term energy
    supply and demand issues before us, in addition to posing challenges,
    provide an opportunity for us to improve our environment and our
    economy while enhancing our energy future.
        Americans share many common concerns regarding that energy future.
    Even shared concerns may not offer one-size-fits-all solutions. Some
    issues will require different approaches that recognize the unique
    dynamics at play due to any number of factors and circumstances.
    Certainly there are issues unique to Indian country, and we must have
    the tools to address them within our national energy policy framework.
        I would like to provide an overview of the Department of Energy's
    structure in order to provide a reference point for the proposed
    legislation. In implementing Secretary Abraham's written direction to
    Department heads requesting that they honor the government-to-
    government relationship that exists between the Federal Government and
    federally recognized Indian tribes, tribal points of contact have been
    established. These 50 points of contact focus on relations with Native
    American tribes and Alaska Natives.
        In addition, within DOE's Office of Congressional and
    Intergovernmental affairs, a Director of Indian Affairs serves as the
    Department's primary point of contact on Native American issues. A
    recent vacancy in that position should be filled in the very near
    future, but the work of the Director continues to be performed through
    our Office of Intergovernmental and External Affairs.
        DOE and our power marketing administrations are committed to
    continuing our work with tribal governments on the many issues in which
    we have a common interest. At this time, I would like to provide some
    insight into how DOE's relationships with American Indians work at the
    program and at the site levels. These representative examples of
    program activities and projects are intended to highlight our
    continuing efforts to improve the energy future specifically for Native
    American Tribes.

    Office of Economic Impact and Diversity [ED]

        ED supports nine Native American/Tribal-owned financial
    institutions through the Bank Deposit Financial Assistance Program.
    These banks are located in a seven-state area: California, Kansas,
    Missouri, Montana, North Carolina, and Oklahoma, and hold a total of
    $19.8 million in certificates of deposit to provide development loans
    to minority and women-owned business enterprises. The Native American
    National Bank is the first tribal owned American owned bank to serve as
    a ``Trustee'' for the Department's Bank Deposit Financial Assistance
    Program, and manages $3.7 million in for the Department of Energy.
        ED provides financial support for the National Center for American
    Indian Enterprise Development, which educates and brings together
    Indian individuals, business owners and corporations seeking business
    relationships with the Indian business community.

    Office of Energy Efficiency and Renewable Energy [EE]

        EE is developing a Web-based tool to aid tribes in addressing their
    energy needs. The site is intended to provide information on the
    process of developing energy resources, case studies, and other
    information.
        EE has participated in numerous tribal conferences, developed a
    brochure, and developed a website as a means of promoting the program
    and renewable energy technology transfer.
        EE has completed installation of a 750 kW turbine on the Rosebud
    Sioux Indian Reservation (Rosebud, SD). The project successfully
    demonstrated the use of ``green tags'' to finance the installation and
    was the first tribe to obtain a USDA Rural Utility Service loan for
    commercial wind development.

        Western Area Power Administration [WAPA]

        WAPA's 15-State service area includes more than 300 tribes, each
    with distinct histories, values, issues and priorities. Transmission
    line rights-of-way cross 900 miles of reservation and tribal lands--a
    total of approximately 10,500 acres. In view of the importance of
    WAPA's work with Native Americans, a full-time Native American Liaison
    [NAL] position has been established at the Corporate Services Office.
    The NAL will provide consultation guidance to all WAPA Regional offices
    and business functions to develop manage and coordinate Native
    American-related initiatives.
        WAPA is currently allocating power, entering sales contracts and
    negotiating delivery arrangements to ensure Native Americans receive
    the benefit of Federal power. WAPA modified its qualification
    requirements to make it possible for Indian tribes to become new
    customers. WAPA continues to extend power allocations to Native
    American beneficiaries as old contracts expire throughout its service
    territory. Western will continue its negotiations to put in place power
    contracts with 90 Indian tribes and Pueblos in 11 States.
        The Department is reviewing the provisions of S. 424 and S. 522.
    These two bills are comprehensive, and we support the goal of
    maximizing environmentally sound resource development on tribal lands.
    We will continue to study the specific provisions of the legislation
    and look forward to working with you toward achievement of our mutual
    objectives.
        That concludes my prepared statement, Mr. Chairman. I hope that my
    testimony provides you and the other members of the committee with a
    good understanding or the importance this Administration attaches to
    our work with American Indian tribes and Alaska Natives in the context
    of the President's National Energy Policy. I would be pleased to
    respond to any questions you may have.

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